NeraTel

NeraTel: OSK DMG notes that NeraTel might be the only Singapore winner in the battle for Myanmar’s telco licences, with both Telenor and Ooredoo being NeraTel's existing customers (according to its channel checks). According to the terms in the Myanmar Telco contract (effective from Sep 2013), both Telenor and Ooredoo have nine months to commence operations and need to cover 75% of Myanmar with voice services and 50% with data services within the next five years. In order to cover such a vast area in a short time frame, DMG expect these telco operators to soon open up project tenders to equipment and system integrating vendors as well as to use radio transmission technology in the process. Given NeraTel’s established track record and expertise in the field, house believe that the group has a high chance of winning the tenders. Separately, NeraTel should record its one-off profit of $7m from the recent Nera Malaysia acquisition in the upcoming 2Q results. DMG cites the increasing the likelihood for the company to surprise the market with interim dividends, adjusting its earnings estimates upwards. DMG maintains its BUY rating with TP of $0.79.